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Warner Bros. Discovery (WBD) released its first quarterly report since the $43 billion merger as the company tackles consolidation challenges.
The media conglomerate lost $3.42 billion in the second quarter, partly due to obstacles related to the recent merger. The stock plunged in after-hours trading, by as much as 9%.
Here are the results from Warner Bros. Discovery on the second quarter compared to Wall Street’s consensus estimates, as compiled by Bloomberg:
Revenue: $9.82 billion vs. $11.91 billion expected
Adj. profit/loss per share: -$1.50 vs $0.08 expected
Total number of DTC subscribers: 1.7 million net additions versus 1.65 million net additions expected
In total, the company said it ended the second quarter with 92.1 million subscribers on its streaming platforms, about 1.7 million more than in the first quarter. It expects to have 130 million global streaming subscribers by 2025.
The company estimated that EBITDA for global streaming will reach $1 billion by 2025, with the streaming business likely to break even by 2024. It expects a peak EBITDA loss in streaming this year.
“We have the most powerful creative engine and the widest range of proprietary content in the world, as evidenced by our industry-leading 193 Emmy nominations, and we intend to maximize the value of that content through a broad distribution model that includes theatre, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more, around the world,” said David Zaslav, President & CEO, in a press release.
“We are confident that we are on the right track to achieve our strategic goals and truly excel, both creatively and financially, and we couldn’t be more excited about the future of our company,” he continued.
Analysts expect messy quarters to come as the streaming conglomerate works to integrate the two companies, boost free cash flow and wind down its balance sheet.
Warner Bros. Discovery previously said it expects to cut $3 billion in costs over the next two years and split those savings into streaming content.
During the company’s earnings call, Zaslav gave some more clarity about the future of HBO Max. He confirmed that the streaming service will become a single platform together with Discovery+, starting next summer.
In the meantime, the two services will share content. The company provided an update on programming ahead of the announcement, revealing that select content from Chip and Joanna Gaines’ Magnolia Network will be arriving on HBO Max in September. It will also remain available on Discovery+.
In addition, TUSEN will have its own hub on Discovery+ with original series such as “Stanley Tucci: Searching for Italy” and “Anthony Bourdain: Parts Unknown”.
Zaslav added that the company will “fully embrace theatrical”, a strategy rumored to be also being explored by Netflix.
On Wednesday, the studio confirmed that two films slated for an HBO Max release – “Batgirl”, starring “In The Heights” star Leslie Grace, and “Scoob!: Holiday Haunt” – have been withdrawn.
Warner Bros. did not immediately respond to Yahoo Finance’s request for comment on the layoff reports or its decision to remove those two films, but did make a statement to TUSEN, which it owns.
“The decision not to release ‘Batgirl’ reflects the strategic shift of our leadership regarding the DC universe and HBO Max,” a Warner Bros. spokesperson said. to the network.
“Leslie Grace is an incredibly talented actor and this decision does not reflect her achievements,” the statement continued. “We are incredibly grateful to the filmmakers of ‘Batgirl’ and ‘Scoob! Holiday Haunt’ and their respective casts, and we hope to work with everyone again in the near future.”
The DC Comics movie was nearing completion and reportedly cost the studio $70 to $90 million to produce.
As investors digest recent headlines about cost cutting, critics were quick to point to CEO David Zaslav’s skyrocketing pay.
Under regulations, Zaslav’s compensation package for 2021 — which runs through the end of 2027 — has risen to a staggering $246 million, significantly higher compared to 2020 ($37.7 million) and 2019 ($45.8 million).
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